Samsung Hikes Galaxy S6 Production Target Based on Market Enthusiasm

By Todd R. Weiss  |  Posted 2015-03-12 Print this article Print
Samsung, Galaxy S6, Galaxy S6 Edge

Samsung's redesigned Galaxy S6 and Galaxy S6 Edge smartphones are doing so well that it is boosting its production plans for the phones starting in April.

Samsung's recently announced Galaxy S6 and Galaxy S6 Edge smartphones are attracting so much consumer interest and so many preorders that the company is already boosting its production targets for the new devices starting in April.

Instead of producing 7 million Galaxy S6 and S6 Edge devices in April, Samsung has placed orders for an extra 1 million units, boosting its order to 8 million smartphones for the month, according to a March 11 report by Korea's Electronic Times newspaper. Samsung had previously said it had ordered 5 million of the smartphones for March, bringing the total production for the two months to 13 million phones.

The new Galaxy S6 and S6 Edge go on sale in 20 countries, including in the United States, starting on April 10.

The production increases were ordered after the company—which has been losing lucrative smartphone sales for some time to Apple's latest iPhone 6 models and to cheaper, well-equipped devices from China—began to see early consumer enthusiasm for the new S6 devices, particularly during the Mobile World Congress event in Barcelona, Spain, earlier this month, according to the report.

Production of the S6 Edge smartphone, with its unique screen that has a curved edge on each side of the display, is expected to be 1 million for March and 3 million in April, the report stated. Those figures could be reduced if there are problems mass producing the complex display shapes, according to the Electronic Times.

In addition, Samsung usually sells about 30 million flagship model smartphones in a year, so the 13 million being produced for initial sales through April is pretty optimistic, a spokesman for an unnamed mobile carrier told the newspaper. "Considering the fact, 13 million per month is a pretty big number," the spokesperson said.

Following MWC, Samsung showed off the new Galaxy S6 smartphones at a special press preview briefing in New York City earlier in March, and the devices were quite impressive, giving some credence to Samsung's hopes that they will hit the mark when it comes to taking on the iPhone 6 and the iPhone 6 Plus around the world.

The improvements in the new S6 smartphones over the previous Galaxy S5 model are many and range from a chassis made of aircraft-grade aluminum to a higher-resolution 5.1-inch, quad HD Super AMOLED (Super active-matrix organic LED) display, Samsung's latest eight-core 64-bit Exynos 7 processors, and new LPDDR4 flash RAM and non-expandable UFS 2.0 flash storage that will be available in three capacities—32GB, 64GB and 128GB.

A successful launch for the next Galaxy is very important for Samsung, which continues to battle its way out of a slump caused by cheap smartphones from China and the release of the new and improved iPhone 6 models from Apple. Samsung has been losing market share and revenue to its rivals and is already in the midst of plans to pare back its model line and cut production costs to better compete, according to earlier eWEEK reports.

Recent research from the Chicago-based Consumer Intelligence Research Partners (CIRP) analyst firm showed that Apple captured about 50 percent of the fourth-quarter 2014 smartphone sales in the United States, which helped the company handily beat its closest competitor, Samsung, by a 2-to-1 margin. Samsung captured 26 percent of the market, followed by 11 percent for LG, 4 percent for Motorola and 2 percent for HTC, according to CIRP's figures. Nokia had 2 percent of the sales, while Amazon had 1 percent.

Samsung's 2014 fourth-quarter earnings, reported in January, were better than its third-quarter figures, but the company's full-year profit and sales were down significantly from 2013. For the fourth quarter ended Dec. 31, 2014, Samsung posted revenue of $48 billion, up 11 percent from $43.2 billion in the third quarter. Net profit for the fourth quarter was $4.8 billion, up 26.3 percent from the $3.8 billion in the third quarter.

The $48 billion in fourth-quarter revenue, however, was down 12 percent from $54 billion in the same quarter one year ago. Full-year 2014 revenue dropped 10.6 percent to $188 billion from $208 billion the year before. The company posted a fourth-quarter net profit of $4.8 billion, down 37.5 percent from $6.6 billion one year ago. Full-year 2014 net profit was $21.28 billion, down 30 percent from $27.7 billion the year before.

In contrast, key rival Apple announced record-breaking first-quarter 2015 earnings on Jan. 27, with $74.6 billion in revenue and $18 billion in net profits, fueled largely by sales of the latest iPhone 6 and iPhone 6 Plus smartphones, which were released last September. The $74.6 billion in quarterly revenue was a 30 percent increase from $57.6 billion in the same quarter one year ago; in that interval, net profit rose 37 percent to $18 billion from $13.1 billion.

Apple's iPhone revenue in the quarter totaled $51.2 billion, up from $32.5 billion for the same quarter one year ago. During the period, Apple sold 74.5 million iPhones worldwide—an increase of 46 percent from the 51 million iPhones Apple sold in the same quarter a year ago.



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